Informed Investor: Understanding the federal government’s survivor benefits - Part VI
This sixth in a series of columns discussing survivor benefits examines survivor annuity benefits for spouses of deceased CSRS annuitants. Among the items reviewed are eligibility requirements for a spousal survivor annuity, the cost to the annuitant for giving a survivor annuity, and the effect of cost-of-living adjustments (COLAs) on CSRS survivor annuities.
- By Edward A. Zurndorfer
- Jul 11, 2016
This sixth in a series of columns discussing survivor benefits for families of deceased federal employees and annuitants examines survivor annuity benefits for surviving spouses of deceased Civil Service Retirement System (CSRS) annuitants.
A former employee covered by CSRS is considered a CSRS annuitant if he or she has met all requirements to retire, has applied for retirement, and dies after his or her CSRS annuity begins to accrue. If a former CSRS employee did not apply for CSRS retirement, but has separated from his or her agency before he or she was eligible to retire, the individual is considered a separated employee and not an annuitant. The information in this column does not apply to a separated employee.
A survivor annuity is payable to the spouse of a deceased annuitant only if the annuitant elected a reduced annuity to provide the survivor benefit. To qualify as a surviving spouse of a deceased annuitant, the individual must have been married to the annuitant at the time of the annuitant’s death and meet one of the following requirements: (1) The surviving spouse and the annuitant were married for at least nine months while the annuitant was in federal service; or (2) a child was born from the marriage.
A surviving spouse may receive only one CSRS survivor annuity based on the service of one employee. But if the surviving spousal CSRS annuitant remarried after age 55 to a CSRS-covered employee, then the surviving spouse may be entitled to more than one CSRS survivor annuity as the following example illustrates:
Margaret marries Arthur while Arthur is a CSRS-covered employee. Two years later Arthur dies in service and Margaret receives a CSRS survivor annuity. After Margaret reaches age 55, she marries Robert, who is a CSRS-covered employee. Two years later Robert dies in service and Margaret is entitled to both CSRS survivor annuities.
A court order awarding a former spouse a survivor annuity prevents the Office of Personnel Management from paying the surviving spouse the portion of the survivor annuity awarded by the court order. But the surviving spouse remains eligible for the complete survivor annuity if the former spouse loses eligibility.
When no survivor annuity benefits are currently payable to the surviving spouse because of the court-ordered entitlement of the former spouse, the surviving spouse can still be entitled to Federal Employees Health Benefits coverage under “spousal equity” rules. This assumes the annuitant was enrolled in the FEHB program and had either self plus one, or self and family coverage, at the time of his or her death.
The maximum possible survivor annuity is 55 percent of the annuitant’s annuity before it is reduced by the cost of the survivor benefit. This cost is equal to approximately 10 percent of the annuitant’s starting gross annuity and remains that amount, even with cost-of-living adjustments. The survivor annuity can be less than 55 percent if the annuitant elected to provide less than the maximum.
COLAs applied to CSRS annuities increase the survivor annuity by the same amount. Upon the death of the annuitant, the initial annuity paid to the survivor will include all previous COLAs that had been granted to the annuitant. The survivor annuity will also increase by all future COLAs.
The following example illustrates:
Carl, age 62, retired from federal service in 2010 with a starting CSRS gross annuity of $100,000. Carl elected to give a full survivor annuity to his wife Elaine, thereby reducing his annuity by $10,000. His starting net annuity was therefore $90,000. Five years later and with COLAs, Carl’s CSRS gross annuity has increased to $105,000. His net annuity is $105,000 less $10,000, or $95,000. During 2015, Carl dies and Elaine receives a CSRS survivor annuity of 55 percent of $95,000, or $53,250, which will also receive COLAs.
A spousal CSRS survivor annuity begins on the day after the death of the CSRS annuitant and ends on the last day of the month preceding the month in which the surviving spouse dies or remarries before age 55, if the marriage to the annuitant lasted less than 30 years.
Upon the death of an annuitant, the surviving spouse of a deceased CSRS annuitant should notify OPM as soon as possible. Upon receipt of the death notice, OPM provides an application for death benefits for the surviving spouse. OPM may be contacted 1-888-767-6738 or TTY 855-887-4957. A surviving spouse can also report the death of an annuitant online at https://www.servicesonline.opm.gov/RSR/AnnuitantDeath.
In reporting a death, the surviving spouse needs to provide the decedent’s full name, retirement claim number, date of death, date of birth, Social Security number and, if available, a certified copy of the death certificate. OPM will also need the address with city, state and zip code and telephone number of contact in order to send the claim forms.
A spouse has 30 years after the CSRS annuitant’s death to file an application for a survivor annuity benefit.